State allows importation of duty-free maize, sugar and rice

Assorted sugar on display at Khetis supermarket in Eldoret. [Christopher kipsang,Standard]

The government has waived import duty on maize, rice and sugar in its latest bid to tame the price of essential food items that have gotten out of reach for many Kenyans.

Maize millers and traders will have six months - between February and August next year to import 900,000 tonnes of white maize into the country, according to National Treasury Cabinet Secretary (CS) Njuguna Ndung'u.

"In light of the notification of an impending food crisis in the country by the CS for Agriculture and Livestock Development, the CS for the National Treasury and Economic Planning directs that 900,000 tonnes of white maize grain and 600,000 tonnes of milled rice may be imported into the country duty-free from February 1, 2023 to August 6, 2023," said Prof Ndung'u in a gazette notice published on Friday.

The government expects that duty-free imports will play part in reducing the cost of maize flour.

The price of maize flour, a staple food across many Kenyan households has risen sharply following poor rains over the last two years, resulting in a two-kilogramme packet going for Sh210 up from about Sh120 previously.

While the move is aimed at reducing the cost of essential foods, especially ugali, the government has been criticised for opening up the duty-free importation to all stakeholders including traders.

There are fears that uncouth players might stock up over the duty-free window and sell later at high prices once import duty is reinstated.

Prof Ndung'u, in a gazette notice also waived import duty on 600,000 tonnes of milled rice that will also be imported between February and August as well as for 100,000 tonnes of sugar that will be brought in by March 2023.

"In light of the notification of the current sugar crisis in the country by the CS for Agriculture and Livestock Development, the CS for the National Treasury and Economic Planning directs that 100,000 tonnes of brown or milled white sugar may be imported into the country duty-free not later than March 31, 2023," he said.

Adequate stocks

Agriculture Cabinet secretary Mithika Linturi yesterday said they have allowed the importation of 10 million bags of maize, 600,000 tonnes of milled rice and 100,000 tonnes of sugar to enable the country to have adequate stocks to last until the next major harvest of July-August 2023.

Linturi noted that domestic sugar demand this year is 980,000 tonnes while our domestic production is 700,000 tonnes leading to a shortfall of 280,000 tonnes.

CS Linturi, who was addressing journalists at Kilimo House, said national annual maize consumption in Kenya stands at 52 million bags and that due to a severe drought and attack by fall armyworms, the country's projected production in 2022 is estimated at 34.1 million bags.

He stated that the country's annual rice consumption is estimated at 600,000 tonnes against the country's national production of 150,000 tonnes.

"It is also imperative to note that due to changing consumption patterns of Kenyans, rice consumption in the country has significantly increased further straining the local supplies. The Government will continue to monitor food security," said Linturi, adding that what has been produced locally can only sustain the country from January to mid-February.

There are however concerns that speculators might bring in the commodities during this window at low prices and not necessarily release them to the market.

United Grain Miller Association Chairman Ken Nyaga said opening up the importation of the grain to all players was ill-advised as it might result in certain traders taking advantage of the window to import cheaply but hoard and sell later when prices go up. Instead, he said, the government should have restricted the importation to millers, whom he noted mill the grain and have an interest in having their different maize flour brands on retail shelves.

"The government is perhaps trying to address two issues - availability of the maize and the price. Allowing duty-free importation might avail the maize in the market. However, opening up the importation to everyone including traders might not guarantee that prices will come down," he said.

"Traders might end up hoarding the maize they import over the duty-free window and wait for an opportune time when prices are high... nobody will force you to sell."

He urged the State to be sensitive to the plight of rice farmers.

The previous administration had in May waived duty on maize as it sought to tame the rising costs of food that saw the retail price of a two-kilogramme packet of maize reach a high of Sh210 up to August.